Just as New Space represented the modern commercialisation of the space industry the defence industry is now seeing a similar shift, and the implications could be huge, according to Alain Durand, New Space and Defence Innovation Expert at Sopra Steria.
Founded in 2021 by three former Bundeswehr officers, ARX Robotics is developing unmanned ground vehicles that can adapt to different military uses. Their cost? Between
€30,000 and €150,000. A Western combat tank, by contrast, costs between €20
and €30 million.
Faced with this gap in scale, which extends across many capabilities, the defence industry is undergoing a reorganisation. As a result, many are using the term ‘New Defence’ to describe the transformation underway, drawing a parallel with what happened in the space sector in the 2000s with the arrival of non-state actors.
Alain Durand, New Space and Defence Innovation Expert at Sopra Steria, has been following this shift for several months in the field he knows best: the one where startups, private capital and civilian technologies are reshaping a sector that has historically been tightly controlled. “In defence, the new competitive advantage is no longer just technology. It is the speed of learning,” he says.
What the space sector has already taught defence
The analogy between space and defence isn’t just a convenient comparison – it’s real. Around 15 years ago, the space sector underwent a similar disruption. Players such as SpaceX replaced the model of costly, rare launch vehicles designed to last with an approach based on rapid production, reusability and continuous development.
“The revolution in reusable launch vehicles was long perceived in Europe as simply a technological success,” recalls Durand. “In reality, it was the product of a much broader transformation combining entrepreneurial innovation, private capital, public support and a new industrial organisation. It is probably this combination that defence players should be looking at today.”
Defence appears to be following the same trajectory as space, with a clear catalyst identified by researchers studying the phenomenon. Recent work by the IHEDN Defence Economics Chair (Institut des hautes études de défense nationale) shows that the number of players has increased nearly sevenfold in the small satellite segment and fivefold in the small drones and high-altitude platforms segment, in just a few years.
The proof is in the numbers
The situation in Ukraine provides the clearest illustration of this shift. Faced with Iranian-Russian Shahed drones, produced at around $30,000 each, Ukraine has developed
interceptors costing around $5,000, whereas a Patriot or NASAMS missile performing the same function costs between $1 million and $4 million.
A recent report by the National Assembly now advocates a “high-low mix” model, combining a limited number of major capabilities with a large volume of attrition equipment, considered better suited to the current needs of European armed forces.
On the industrial side, the change is already underway. Players such as Helsing, Anduril, Shield AI and ARX Robotics are demonstrating that it is possible to rapidly develop new military capabilities by relying on software architectures, data exploitation and continuous improvement cycles inspired by the digital sector.
On the financing side, the momentum is equally clear. German startup STARK has just raised €500 million. “This fundraising goes far beyond the financing of a company,” says Durand. “It illustrates a profound shift in Europe’s strategic industries, the emergence of players capable of simultaneously mobilising venture capital, institutional investors, technological innovation and public procurement.”
The work of the Defence Economics Chair also shows that a significant proportion of these new players finance their growth according to models close to those of civilian technology startups, making greater use of venture capital and private equity than traditional financing mechanisms in the sector.f
Sovereignty, beyond company ownership
The parallel with New Space nevertheless has a limitation – the risk of acquisition by non-European capital. Three clear cases illustrate this. Sky Hero, a Belgian drone specialist, was acquired by US company Axon as early as 2023. Milrem Robotics, the Estonian leader in unmanned ground vehicles, saw Emirati group EDGE take a majority stake in the same year. Meanwhile, Latvian SME UAV Factory came under US ownership before joining the Redwire group in 2025.
But ownership is only part of the issue. In increasingly digitalised systems, sovereignty also depends on control over data, software, artificial intelligence models and digital architectures, as well as the ability to evolve these systems over time.
“The risk is now identified,” warns Durand. “It is not only that of technological backwardness. It is that of a lasting strategic decline.” Defence remains subject to secrecy, export controls and sovereignty imperatives that have no equivalent in the civilian space sector. The shift towards scale and speed therefore cannot take place according to the same rules of openness. Otherwise, there is a risk that technologies developed by the European ecosystem will ultimately finance the sovereignty of other powers.
Coexist, not replace
New Defence does not call into question the usefulness of major weapons programmes, which will remain necessary for the most critical capabilities. It does, however, require
them to coexist with a more agile ecosystem, capable of continuously integrating new entrants, taking measured industrial risks and supporting the scaling up of the technologies that emerge as winners.
It is in this space that Sopra Steria is structuring its own response, through its open innovation initiatives and venture capital activities, to connect startups, established
industrial players and public-sector actors and accelerate the integration of dual-use technologies into sovereign environments. Because, as Durand reminds us: “In New Defence, the decisive question is no longer simply that of technological excellence. It is the ability to rapidly transform innovation into scale, resilience and operational advantage.”